Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Private Capital Markets

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In this insight, we provide further details of Yanolja which has become the second largest investment for Softbank in Korea, after Coupang. In July 2021, Softbank Group Corp's Vision Fund II agreed to invest $1.7 billion in <a href="https://www.bloomberg.com/news/articles/2021-07-15/softbank-invests-1-7-billion-in-korea-s-yanolja-ahead-of-ipo" target="_blank" rel="noopener">Yanolja, </a>which is getting ready for an IPO in 2H 2021/2022.
Established in 2005, Yanolja is considered to be the second largest property management software provider in the world after Oracle. Yanolja plans to use the investment to expand overseas and further invest in improving its technologies. Softbank's investment in Yanolja valued the company at about <a href="https://www.edaily.co.kr/news/read?newsId=01095526629143384&amp;mediaCodeNo=257&amp;OutLnkChk=Y" target="_blank" rel="noopener">9 trillion won</a> ($8 billion). Currently, Yanolja has about 1,500 employees, including about 1,000 employees in Korea and 500 employees overseas. 
<a href="http://www.theinvestor.co.kr/view.php?ud=20190612000473" target="_blank" rel="noopener">Yanolja</a> became a unicorn in June 2019 when it received a $180 million Series D round investment valuing the company at more than $1 billion. It is astounding how this company's valuation has jumped nearly 8x in the past two years. In addition to Softbank, other investors in Yanolja include GIC, Booking Holdings, Skylake Investments, <a href="https://www.smartkarma.com/entities/sbi-investment-korea-co-ltd" target="_blank" data-smartkarma-citation="entities:17244:1" rel="noopener">Sbi Investment Korea (019550 KS)</a>, and Aju IB Investments.
Softbank's recent investment in Yanolja would suggest a P/S multiple of 31x, which is very high. In November 2020, Yanolja selected <a href="https://www.bloomberg.com/quote/006800:KS" target="_blank" rel="noopener">Mirae Asset Daewoo Co.</a> as a lead arranger along with <a href="https://www.bloomberg.com/quote/016360:KS" target="_blank" rel="noopener">Samsung Securities Co.</a> as a co-underwriter. The company has yet to determine whether it would list in the U.S. or in Korea.
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In this insight, we provide further details of Yanolja which has become the second largest investment for Softbank in Korea, after Coupang. In July 2021, Softbank Group Corp's Vision Fund II agreed to invest $1.7 billion in Yanolja, which is getting ready for an IPO in 2H 2021/2022.
Established in 2005, Yanolja is considered to be the second largest property management software provider in the world after Oracle. Yanolja plans to use the investment to expand overseas and further invest in improving its technologies. Softbank's investment in Yanolja valued the company at about 9 trillion won ($8 billion). Currently, Yanolja has about 1,500 employees, including about 1,000 employees in Korea and 500 employees overseas. 
Yanolja became a unicorn in June 2019 when it received a $180 million Series D round investment valuing the company at more than $1 billion. It is astounding how this company's valuation has jumped nearly 8x in the past two years. In addition to Softbank, other investors in Yanolja include GIC, Booking Holdings, Skylake Investments, Sbi Investment Korea (019550 KS), and Aju IB Investments.
Softbank's recent investment in Yanolja would suggest a P/S multiple of 31x, which is very high. In November 2020, Yanolja selected Mirae Asset Daewoo Co. as a lead arranger along with Samsung Securities Co. as a co-underwriter. The company has yet to determine whether it would list in the U.S. or in Korea.


Why Did Softbank Invest $1.7 Billion in Yanolja in Korea?

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

The leading Chinese travel platform <a href="https://www.smartkarma.com/entities/trip-com-group-ltd" target="_blank" data-smartkarma-citation="entities:180:1" rel="noopener">Trip.com (TCOM US)</a>  has set the terms for its IPO where it plans to issue 31.6m shares at a maximum indicative price of HK$333.00 per share. At the above price, Trip.com will raise net proceeds of HK$10.4bn (approx. US$1.4bn).Each ADS represents one ordinary share of the company, and the maximum HK offer price implies approx. US$42.8 per ADS, about 10.3% premium to Trip.com’s last close price of US$38.81 per ADS prior to setting the terms. The Hong Kong offering of 31.6m shares will constitute approx. 5.0% of the extended share capital of the company.Trip.com plans to use about 45% of the net proceeds on funding the expansion of the company’s one-stop travel offerings and improve user experiences while it plans to use another 45% of the net proceeds on investing in technology to bolster the company’s leading market position in products and services while also improving operating efficiency.In this insight, we examine the company’s current valuation and our view on HKEX/ADR discount/premium.

The leading Chinese travel platform Trip.com (TCOM US)  has set the terms for its IPO where it plans to issue 31.6m shares at a maximum indicative price of HK$333.00 per share. At the above price, Trip.com will raise net proceeds of HK$10.4bn (approx. US$1.4bn).Each ADS represents one ordinary share of the company, and the maximum HK offer price implies approx. US$42.8 per ADS, about 10.3% premium to Trip.com’s last close price of US$38.81 per ADS prior to setting the terms. The Hong Kong offering of 31.6m shares will constitute approx. 5.0% of the extended share capital of the company.Trip.com plans to use about 45% of the net proceeds on funding the expansion of the company’s one-stop travel offerings and improve user experiences while it plans to use another 45% of the net proceeds on investing in technology to bolster the company’s leading market position in products and services while also improving operating efficiency.In this insight, we examine the company’s current valuation and our view on HKEX/ADR discount/premium.

Trip.com Secondary: Further Upside to SOTP Possible with Recovery in Travel and Hospitality Sector

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<a href="https://www.smartkarma.com/entities/trip-com-group-ltd" target="_blank" data-smartkarma-citation="entities:180:1" rel="noopener">Trip.com (TCOM US)</a> is a leading one-stop travel platform that currently operates through four leading travel brands which are Ctrip, Qunar, Trip.com and Skyscanner. Trip.com passed its Hong Kong listing committee hearing and could raise up to $1-2 billion through a secondary listing, according to press reports. Trip.com is braving choppy markets and waning investor enthusiasm on secondary listings/IPOs. The recent Hong Kong secondary listings of <a href="https://www.smartkarma.com/entities/autohome-inc-adr" target="_blank" data-smartkarma-citation="entities:20234:1" rel="noopener">Autohome Inc (Adr) (ATHM US)</a> and <a href="https://www.smartkarma.com/entities/bilibili-inc" target="_blank" data-smartkarma-citation="entities:26793:1" rel="noopener">Bilibili Inc (BILI US)</a> are trading 3% and 8% above their H-share listing price, respectively. <a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a> is trading -13% below its H-share listing price largely due to the fallout from the fire sale at Archegos Capital.   <div class="content-highlight">Trip.com is a play on the expected reopening and recovery of travel in 2021 due to the global rollout of vaccines. In the post-pandemic world, Trip.com aims to cement its market share gains through strengthening its supply chain (such as short-distance travel), higher conversion via content investment (such as live streaming) and rising penetration in lower-tier cities (&gt;40% of new mobile app users in 2020 were from lower-tier cities). We think that Trip.com is an attractive play on travel recovery at the last close price. </div>

Trip.com (TCOM US) is a leading one-stop travel platform that currently operates through four leading travel brands which are Ctrip, Qunar, Trip.com and Skyscanner. Trip.com passed its Hong Kong listing committee hearing and could raise up to $1-2 billion through a secondary listing, according to press reports. Trip.com is braving choppy markets and waning investor enthusiasm on secondary listings/IPOs. The recent Hong Kong secondary listings of Autohome Inc (Adr) (ATHM US) and Bilibili Inc (BILI US) are trading 3% and 8% above their H-share listing price, respectively. Baidu (BIDU US) is trading -13% below its H-share listing price largely due to the fallout from the fire sale at Archegos Capital.   Trip.com is a play on the expected reopening and recovery of travel in 2021 due to the global rollout of vaccines. In the post-pandemic world, Trip.com aims to cement its market share gains through strengthening its supply chain (such as short-distance travel), higher conversion via content investment (such as live streaming) and rising penetration in lower-tier cities (&gt;40% of new mobile app users in 2020 were from lower-tier cities). We think that Trip.com is an attractive play on travel recovery at the last close price. 

Trip.com Secondary Listing: No Heads in the Clouds

Oshadhi Kumarasiri

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<li>As <a href="https://www.smartkarma.com/entities/airbnb-inc" target="_blank" data-smartkarma-citation="entities:431:1" rel="noopener">Airbnb Inc (9865065Z US)</a> upped the IPO price range from $44-50 per share to $56-60 per share, we update our valuation and examine the company’s long-term prospects below.</li>
<li>Even though Airbnb is not exceedingly cheap at the new IPO price range, we believe there is still significant (9-27%) upside to Airbnb shares, even at the higher end of the IPO price range. Therefore, we continue to favour Airbnb and recommend subscribing to the IPO.</li>
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As Airbnb Inc (9865065Z US) upped the IPO price range from $44-50 per share to $56-60 per share, we update our valuation and examine the company’s long-term prospects below.
Even though Airbnb is not exceedingly cheap at the new IPO price range, we believe there is still significant (9-27%) upside to Airbnb shares, even at the higher end of the IPO price range. Therefore, we continue to favour Airbnb and recommend subscribing to the IPO.


Airbnb Upped the Price By 20-27%: Still Plenty of Value Left

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Airbnb aims to raise up to US$3.1bn in its US listing. Airbnb is a global short-stay offering platform. To put it simply, it connects hosts, who post available accommodation on Airbnb, with guests, who make bookings for the accommodation. It charges a fee for this service.As of 9M20, it had 4 million hosts in more than 220 countries and regions around the world. Since inception, its hosts have welcomed over 825m guest arrivals and have cumulatively earned over $110bn. In 2019, it had 54m active bookers worldwide, who booked 327m nights and experiences on Airbnb.Over 2017-19, the company reported steady growth in earnings led by an increase in the number of bookings. Its overall number of guests and hosts have been growing as well, with most metrics heading in the right direction. I’ve covered various aspects of the deal in my previous note, <a href="https://www.smartkarma.com/insights/airbnb-ipo-time-for-a-good-break-even-from-the-share-lock-up" target="_blank" rel="noopener">Airbnb IPO - Time for a good break - even from the  share lock-up</a>. In this note, I’ll take a look at its peers recent performance and talk about valuations.

Airbnb aims to raise up to US$3.1bn in its US listing. Airbnb is a global short-stay offering platform. To put it simply, it connects hosts, who post available accommodation on Airbnb, with guests, who make bookings for the accommodation. It charges a fee for this service.As of 9M20, it had 4 million hosts in more than 220 countries and regions around the world. Since inception, its hosts have welcomed over 825m guest arrivals and have cumulatively earned over $110bn. In 2019, it had 54m active bookers worldwide, who booked 327m nights and experiences on Airbnb.Over 2017-19, the company reported steady growth in earnings led by an increase in the number of bookings. Its overall number of guests and hosts have been growing as well, with most metrics heading in the right direction. I’ve covered various aspects of the deal in my previous note, Airbnb IPO - Time for a good break - even from the  share lock-up. In this note, I’ll take a look at its peers recent performance and talk about valuations.

Airbnb IPO - Peer Comparison and Valuation - Smaller but Nimbler, Possible COVID Winner

United States

Booking Holdings Inc. operates as an online travel company. The Company offers a platform that allows to make travel reservations with providers of travel services, as well as provides accommodation reservations, rentals cars, airline tickets, and vacation packages. Booking Holdings serves customers worldwide.

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Booking Holdings (BKNG US)

Why Did Softbank Invest $1.7 Billion in Yanolja in Korea?

We provide further details of Yanolja which has become the second largest investment for Softbank in Korea. In July 2021, Softbank Group Corp's...

Douglas Kim

Trip.com Secondary: Further Upside to SOTP Possible with Recovery in Travel and Hospitality Sector

We believe there will be further upside to our SOTP once the global travel market starts recovering from the pandemic and HKEX listing will be...

Shifara Samsudeen, ACMA, CGMA

Trip.com Secondary Listing: No Heads in the Clouds

Trip.com passed its HKEx listing hearing to raise up to $1-2bn through a secondary listing. We think that Trip.com is an attractive play on travel...

Arun George

Airbnb Upped the Price By 20-27%: Still Plenty of Value Left

As Airbnb upped the IPO price range from $44-50 per share to $56-60 per share, we update our valuation below. Even though Airbnb is not exceedingly...

Oshadhi Kumarasiri

Airbnb IPO - Peer Comparison and Valuation - Smaller but Nimbler, Possible COVID Winner

Airbnb aims to raise up to US$3.1bn in its US listing. Even at the revised price range, the stock is still at a discount to booking.com.

Sumeet Singh

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